Monday, June 30, 2008

The big R

Just about sums it up; the performance of Irish shares over the past two years on the ISEQ index.

Since the ESRI publication last week with the Celtic Tiger epithet "Thus Ireland will experience a recession for the first time since 1983" public commentary has been by and large one of gloom. The weekend papers had a fine time, with reminiscing from 40 somethings on the recession of the 1980's.

This morning the CSO confirmed that the first quarter of 2008 showed negative growth.

However not all bought into the script with some of the economists still King Canute like insisting all was well. A special mention must go to Dan Mc Laughlin of Bank of Ireland, a bullish economist who has a habit of getting ever prediction he makes wrong; he has been wrong about Irish economic growth rates, house prices, inflation and ECB interest rates. But he is not alone, with the exception of Jim Power, all the commentary and analysis from the bank employed economists over the past two years has been dishonest and self serving.

And normally that's fine, these economists know "who pays the piper plays the tune" and know that their employers need confident consumers to spend and seek loans. The problem has arisen that these economists were elevated into Oracles. RTE regularly sought out the economists to comment of the latest reports or news on the economy as if they were independent and neutral. Those who urged caution, such as George Lee or David Mc Williams were dismissed as doom merchants.

Indeed His Bertness himself claimed in 2007 that not alone was all rosy in the garden but that "sitting on the sidelines, cribbing and moaning is a lost opportunity. I don't know how people who engage in that don't commit suicide because frankly the only thing that motivates me is being able to actively change something".

Says a man who has since dumped the problem into the laps of other as he hadn't the guts to stick around.

Part of the recovery process of this country should include a in depth post-mortem to how we went from a bust to boom to bust economy. Questions that need to be addressed is why employees of the banking industry were allowed, usually unchallenged, access to the state broadcaster to decieve the Irish public on the actual trends and direction of the economy.

p.s. What is going on in Bank of Ireland - its share price just seem to be in freefall at this stage.

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